How to Find a Financial Advisor

September 14, 2022
for People

Finding a financial advisor is already complicated, but finding the right financial advisor can be even more challenging. So how can you better prepare yourself for finding an advisor that is uniquely right for you?

Don't just hire the advisor your friend works with.

You’re likely different than your neighbor and your best friend. For example, you might have a family and children, while your best friend is single and doesn’t have many financial responsibilities, unlike yourself. You two are different - you have different needs, wants, and lifestyles. Working with their financial advisor may not be the best decision for you as the advisor's style may not align with yours. If you do end up scheduling a meeting with your friend's advisor, carefully explain your specific goals, risk tolerance, and lifestyle. Avoid the recommendation pitfall. Be careful about taking financial recommendations from your friends as you’re likely to face biased recommendations because they may not be the best judge.

Work with an advisor whose strategy is aligned with yours.

Sounds simple enough right? Unfortunately, it’s not. You’re unique – you have a unique risk tolerance, work style, needs and wants, and require a unique set of services provided. Choosing an advisor that fits your situation is crucial in the overall success of why you decided to find an advisor in the first place – to achieve your financial goals and make you feel more confident! With AdFi, we give you the power to search for who you want, what services you want, and even what you’d like to pay. 

Understand what you're paying.

Fees are complicated. There are flat fees, percentage fees, one-time fees, and more. The bottom line is that costs matter, and you need to understand what you will pay. Be sure to ask your advisor which fee structure they use and understand what extra fees you will be charged, like mutual fund fees or fees from other financial products. Here’s a breakdown of the most common fee structures of financial advisors.

Ask specific questions to your advisor.

Financial advice can affect your life for years, and receiving conflicted advice can take years to fix. As such, be sure to pay close attention to an advisor's credentials – do they have the proper licenses or credentials? The Series 7 and Series 66 (or Series 63 + Series 65) are the tests that advisors take. Some advisors go beyond that and get the CFP or CFA to provide better financial planning or asset management advice.

Here's a list of common credentials for advisors:
  • Series 7 - General Securities Representative Exam
  • Series 66 - Uniform Combined State Law Exam
  • Series 63 - Uniform Securities Agent State Law Exam
  • Series 65 - Uniform Investment Adviser Law Exam
  • Certified Financial Planner™
  • Accredited Investment Fiduciary

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